Can you add leverage to an existing trade?

This is a discussion on Can you add leverage to an existing trade? within the General Trading Chat forums, part of the T2W Archive category; Lets say I buy XYZ at 132.10 without any leverage... XYZ goes up a little ways to 132.20, can I ...

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Old Jun 26, 2009, 8:40pm   #1
Joined Jun 2009
Can you add leverage to an existing trade?

Lets say I buy XYZ at 132.10 without any leverage...

XYZ goes up a little ways to 132.20, can I add a leverage to this position, like 10:1 or something?

Or can you only add leverage before the purchase?
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Old Jun 26, 2009, 9:50pm   #2
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On the live exchanges for shares you cannot use leverage and in terms of futures contracts, you will automatically be using leverage when you enter a positional trade using most brokers, i can't imagine you'd even enter a position without leverage.
With shares, leverage doesn't exist except in the form of Spreadbetting and CFD's and you, as an American cannot use such products.
...
What exactly are you trading?

I think you may have confused margin with leverage maybe?
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Old Jun 26, 2009, 10:15pm   #3
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teh pk sh0w started this thread So is margin the cash that you put down and leverage is what you borrow to increase the value of your position?
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Old Jun 27, 2009, 3:22am   #4
 
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So let me get this right? You want to walk into a bookie, place a bet and if you know this bet is going to come off you want to increase your risk and still get the same odds. No chance. If you want to risk more on the trade you need to open a new bigger position.
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Old Jun 28, 2009, 2:56am   #5
 
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Originally Posted by Masquerade View Post
So let me get this right? You want to walk into a bookie, place a bet and if you know this bet is going to come off you want to increase your risk and still get the same odds. No chance. If you want to risk more on the trade you need to open a new bigger position.
which may involve higher or lower leverage than before
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Old Jun 28, 2009, 3:02am   #6
 
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Originally Posted by teh pk sh0w View Post
So is margin the cash that you put down and leverage is what you borrow to increase the value of your position?
yes, something like this,

if we typically use the purchase of a house as an example,

the amount you put down as a deposit for it, in the trading/investing world, this would equate to your margin. the bank would then 'loan' you the remainder of the money to cover the value of the house, so that you may buy it.

in essence this 'loan' will be 'x' amount of your yearly salary, in otherwords the leverage the bank is going to give you.

you then pay back this borrowed amount to ultimately 'own' the house, in trading/investing, you dont pay this loan back unless you want to take physical delivery of the asset.

however in both circumstances, you are directly responsible for loss of equity on cash out.
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Old Jun 29, 2009, 10:05am   #7
 
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Originally Posted by Masquerade View Post
So let me get this right? You want to walk into a bookie, place a bet and if you know this bet is going to come off you want to increase your risk and still get the same odds. No chance. If you want to risk more on the trade you need to open a new bigger position.
This isn't the same, at all.
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